If you are self-employed, or you know of anyone who is, please see our guidance below:
In the last few days, we have been frequently contacted about the impact of the coronavirus outbreak and how it might affect the self-employed.
Given that there are now more than five million self-employed people in the UK, accounting for over 15% of the workforce, this is an important issue, which we address below:
The self-employed cannot access Statutory Sick Pay in normal conditions and this will not be relaxed (so far) during the Coronavirus epidemic. Instead the self-employed who find themselves in financial difficulties must apply for Universal Credit.
• The minimum income floor in Universal Credit (a deemed level of earnings) will be temporarily relaxed for those directly affected by COVID-19 or self-isolating, ensuring self-employed claimants will be compensated for losses in income
• The self-employed will be able to claim UC and access advance payments where they are directly affected by COVID-19 (or self-isolating), without the current requirement to attend a job centre. All applications will now be on-line: https://www.universal-credit.service.gov.uk/postcode-checker
If this is your first claim for Universal Credit, you should bear in mind that it takes five weeks (or sometimes more) for the first payment to come through. If you can’t wait that long for money to live on, the easiest option is to ask for an advance payment.
This is an upfront payment of your benefit. The maximum you can receive is the amount of your first estimated payment. This advance is paid back from your Universal Credit in instalments over 12 months – with that being extended to 24 months from October 2021.
Universal Credit recipients can apply to an additional scheme offering what’s called a Budgeting Advance.
You may be able to get a Budgeting Advance to help with:
• emergency household costs such as replacing a broken cooker
• getting a job or staying in work
• funeral costs
You’ll repay it through your regular Universal Credit payments – these will be lower until you pay it back. If you stop getting Universal Credit, you’ll have to repay the money in another way.
The smallest amount you can borrow is £100. You can get up to:
• £348 if you’re single
• £464 if you’re part of a couple
• £812 if you have children
Other assistance available
In addition, there are two new general measures, which the self-employed can access
• HMRC has set up a dedicated COVID-19 helpline to help those in need, and they may be able to agree a bespoke Time to Pay arrangement. HMRC will also waive late payment penalties and interest where a business experiences administrative difficulties contacting HMRC or paying taxes due to COVID-19. Here is a link to our detailed blog piece on this https://srcadvisory.com/blog/dedicated-covid-19-hmrc-payment-helpline
• A new, temporary Coronavirus Business Interruption Loan Scheme, delivered by the British Business Bank, to support businesses to access bank lending (loans of up to £5 million) and overdrafts. The government will provide lenders with a guarantee of 80% on each loan. Here is a link to our detailed blog piece on this https://srcadvisory.com/blog/important-coronavirus-business-interruption-loan-scheme
We would suggest that you should be discussing preparations with your clients, particularly remote working if you can.
It would also be prudent to consider how the coronavirus may affect your contractual obligations, for instance checking whether you have ‘force majeure’ clauses in place and whether they would in any case be covered during this crisis.
You may also wish to check what health or income protection insurance you have in place. There are a number of options available if you are not currently covered however we would caution that these policies often have a deferral period of three to four weeks and may not provide appropriate cover if you are forced to self-isolate, so it is vital you are aware of the policy T&Cs before making any decision.
Given the current uncertainty and climate rest assured we are here to help all our clients ensure business continuity and we hope you found this article helpful. As one of our valued self-employed clients, we can work with you to seek any available funding or a time to pay arrangement with HMRC or advise on how best to claim Universal Credit.
Our expert team is available to provide you with advice and can be contacted on 01273 326 556 or you can drop us an email at email@example.com or speak with an account manager to get any process started.
Here at SRC-Time, we will endeavour to keep you updated with all the latest information regarding financial aid at this testing time. Please note that the Government makes fresh announcements every day so please ensure that you have the latest information.